Oakland $10.20 Minimum Wage Ordinance Held in Committee

An Oakland City Council ordinance that would enact a citywide minimum wage of $10.20 was held in committee Tuesday while staff continues to study the issue. Meanwhile, a potential local initiative for the November ballot to raise the minimum wage to $12.25 per hour continues to gain steam. The proposed ordinance was introduced by Councilmember Larry Reid, who chairs the Community and Economic Development Committee. Reid’s colleagues on the committee all issued support for proposal as a good first step, while hinting at a preference for a higher wage.

“His goal is to have a minimum wage with little or no drastic impacts on small businesses owners,” Reid’s chief of staff Ray Leon told the committee. The plan would also adjust the minimum wage based on inflation, said Leon, including exemptions for youth job training programs and for small businesses based upon the number of employees and how much revenue they generate.

Al Auletta, program manager for Oakland Economic and Workforce Development staff, said since the San Francisco Bay Area has a higher cost of living, any minimum wage ordinance should be based on a local consumer price index. Auletta added, a wage bump would increase discretionary spending in Oakland and increase worker productivity, loyalty to their jobs and better service for consumers. It is not clear how any minimum wage increase, be it $10.20 per hour, $12.25 or $15 urged by some, will affect commerce. According to a city staff report, among small businesses in Oakland, restaurants could be more impacted than others. However, Auletta said any rises in restaurant prices are marginal and historically absorbed by customers.

Michael LeBlanc, owner of Pican restaurant, said he is in favor of raising the minimum wage and, specifically, Reid’s proposal. Oakland’s thriving downtown restaurant scene has positively changed the outside perception of the city, he said. “The reality is if the minimum wage were $15, I could no longer operate in Oakland.”

“I think a lot of it is how fast it goes up and if it allows businesses to accommodate it,” said City Council President Pat Kernighan. She also believes some restaurants in Oakland could handle the higher $12.25 figure, but called raising the minimum wage a regional issue and worried some businesses might be forced to move to neighboring cities. “If Oakland gets out ahead of its neighboring East Bay cities it would be bad for our city,” she said.

Berkeley Mayor Tom Bates has recently urged for a regional approach to raising the minimum wage and publicly predicted Oakland’s $12.25 ballot measure will be passed by voters this fall. Reid suggested Tuesday afternoon, the city collaborate with Bates on the issue. Councilmembers Libby Schaaf and Lynette Gibson McElhaney both said they could support Reid’s $10.20 plan for now, although both urged for more analysis, in addition to voicing interest in the potential $12.25 ballot initiative. Oakland does not currently have a city minimum wage. The state minimum wage, however, is set to raise to $9 per hour this July before increasing to $10 in 2016. At the federal level, President Obama is seeking to raise the minimum wage to $10.10.

Many progressives, however, believe the minimum wage should be even higher. Oakland mayoral candidate and civil rights attorney Dan Siegel called for the committee to amend Reid’s proposed ordinance to $15 per hour. Siegel cited a city study that found a family of four in Oakland needs to earn a gross income of $86,000-a-year to stave off poverty. Such a figure, he said, would call for two members of the household to earn a minimum of $20 per hour. “We need to have a wage policy in Oakland that will allow our workers to get away from a life of poverty,” said Siegel.

In response to Reid’s $10.20 per hour proposal, Oakland resident David Colburn added, $12.25 is already a compromise to $15 per hour. “Then to undercut that for $10.20 is, I think, sort of grotesque,” said Colburn. “I hope this doesn’t go anywhere, because it shouldn’t.”